You are here

Billionaire's mission to moon landed in Court

[WASHINGTON] Harald McPike had been to the North Pole. The South Pole. Climbed the tallest peak in Africa, the volcano that is the highest point on earth and the mountain that's not Everest but gives you a great view of its deadly face. What was left? He wanted to hit the moon with a tennis ball.

So when the northern Virginia company Space Adventures told Mr McPike he could get into lunar orbit for US$150 million, the Bahamas-based, Austrian-born billionaire trader put down a US$7 million deposit.

Five years later, Mr McPike has settled a lawsuit against entrepreneur Eric Anderson's company after spending two years in litigation trying to get his deposit back. Mr McPike's not going around the moon. When any private traveller might do so is unclear.

The lawsuit in federal court in Alexandria, Virginia, shows how precarious the world of commercial space travel is, in which customers hoping for the ultimate exclusive vacation fund technological projects both uncertain and extremely expensive.

Market voices on:

In litigation, lawyers for the company said Mr McPike had bought not a seat but "an opportunity" to be part of a potential mission.

"It is an undeniable fact that the Russians have never sent a man around the Moon and that the US had not done so in 40 years," they wrote in one filing.

Space Adventures declined to comment for this story. In one Court hearing, a lawyer for the company said it is "not in the business of litigating, they're in the business of getting people to space".

Unlike Jeff Bezos' Blue Origin, Elon Musk's SpaceX and Richard Branson's Virgin Galactic, Space Adventures is not trying to build its own tourist rockets. (Mr Bezos owns The Washington Post.) The company contracts with the Russian government, which uses investments from tourists to modernise. Nasa also buys seats on Russian rockets.

But Mr Anderson, the co-founder and chairman, is the first and only entrepreneur to successfully send tourists - seven of them - to the International Space Station. He set out to be the first to get them to the moon.

Mr Anderson has founded several other companies, with mixed success. Planetary Resources, an asteroid-mining project, floundered before being bought last year by a blockchain company. Planetary Power, which aimed to bring hybrid generators to places off the electric grid, folded.

Former board members of Space Adventures - now part of a company called Zero-Gravity Holdings - have complained that Mr Anderson kept investors in the dark.

One shared with Mr McPike emails airing concerns about lack of access to contracts and other information. In one 2013 email, highlighted by Mr McPike, a Space Adventures lawyer said he couldn't provide the company's contract with Russia for the "lunar voyage" because it did not yet exist.

In Court filings, Space Adventures went after Mr McPike's character, suggesting Mr McPike was no naive adventurer but a gambler trying to weasel his way out of a binding contract. In the words of Mr McPike's own lawyers, they painted him as "a fashion model-chasing, tax-evading billionaire".

Mr McPike acknowledged under questioning by Mr Anderson's lawyer that he had been kicked out of 20 to 50 casinos for card-counting at blackjack, which is how he made his first few hundred thousand dollars. He disputed assertions by Mr Anderson's lawyers that he had moved to the Bahamas to avoid taxes.

In one Court filing, Space Adventures called "cringe-worthy" Mr McPike's "record of personally conducting 'casting calls' for aspiring Eastern European models", while promising it was not likely to come up at trial.

Mr McPike's lawyers countered in their filings that Space Adventures spent an "embarrassing amount of time" focusing on his "irrelevant interactions with fashion models".

Mr McPike himself thinks Space Adventures should be cringing.

"I'm not embarrassed that I live in the Bahamas, that I counted cards when I was a young man, or for anything else," he said in a statement. "I would be embarrassed if I ran a business that misled its customers and then tried to publicly humiliate them to distract from what's really going on."

He filed a flurry of motions to keep his personal life out of the trial that nearly took place this spring.

The relationship between Mr McPike and Space Adventures didn't start like this. In 2012, he contacted the company through its website and set up a meeting in the Bahamas. He signed up. They began talking logistics.

"There was a proposal that he hit a tennis ball to the moon which was ridiculous and rejected, I think, immediately," Space Adventures employee Andrew Mart said in one deposition. "But Mr. McPike is - is an avid tennis player and, so, I thought if it was possible, it would be interesting... I believe we - we discussed some rocket propelled devices but anything that was flammable was - was a concern."

Peter Wirth, a fellow Bahamas-based financier, has travelled the world with Mr McPike. His friend climbed Lhakpa Ri in the Himalayas with a knee injury, calmly huddled in a tent for 48 hours during an Arctic storm and slept on top of Mount Chimborazo in Ecuador. Mr McPike and his ex-wife started the world's "first travelling high school" so their son could see the world. (Tuition: US$85,500 a year, though there are scholarships.)

"He just wanted to go to into untested waters - it was always a dream of his," Mr Wirth said.

"There's not many places where no one has been before."

Mr McPike met with representatives of the Russian space agency in southern Kazakhstan, where the rocket would launch. But he started having doubts and asked that he keep making multimillion-dollar payments only if certain targets were met.

A lawyer for Space Adventures said in court that Mr McPike was "not the first space flight billionaire who's thought of that". But in space, he said, "You have to pay as you go, you don't get your money back, and nothing is guaranteed."

The contract did say that if the Russians didn't launch, Mr McPike would get most of his money back - just not his initial deposit.

Mr McPike started questioning the terms of the agreement, especially after a 2014 Moscow Times article in which an official from Russian space agency Roscosmos expressed unawareness of the circumlunar project and disputed the agency's involvement.

"This was an incredibly tumultuous time within the Russian space industry," Mr Anderson said in a deposition. But, he said, he was confident that "we had the relationships."

Mr McPike was unconvinced by Space Adventures' reassurances, particularly because he had been told he could get to the moon in six to eight years. A diabetic in his 60s, he worried that if it took any longer, he wouldn't be healthy enough for space travel. He stopped making payments, and Space Adventures canceled his contract. Starting in 2017, two high-priced legal teams fought over the deposit.

"There's US$7 million at stake," Judge TS Ellis pointed out in one hearing. "I don't know about you all personally, but big-time lawyers, and you guys are, all of you, would not take long to rack up at least half of that amount or more. Now, Mr McPike is alleged to be a billionaire, but he didn't get there because he's stupid... People who care about making a lot of money typically don't want to throw it away."

What the two sides ultimately decided is unclear. The settlement finalised in April is sealed; each side agreed to pay its own legal costs but would not comment further on whether money changed hands.

Space Adventures is still pursuing its planned moon trip. On its website, the company promises that "if you chose to join this Circumlunar mission you will see the illuminated far side of the Moon, and then witness the amazing sight of the Earth rising above the surface of the Moon".